Mike Cataldo is now on his second healthcare startup. After a successful exit on his first venture, his new company is rolling out a whole line of new innovative products in the dental space.
On the Dealmakers Show Cataldo shared his experiences in raising capital, the process of going through an acquisition, and the four tenents of effective hiring and teamwork.
Listen to the full podcast episode for all of the details here.
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When You Hit A Dead End, Try Something Else
I’ve always found that those that give up do so because they don’t know how close they are to making it happen. It is often simply those that keep on going until everyone else gives up that are the ones that succeed. Mike Cataldo is definitely in this second group.
Mike was born in Worcester, Massachusetts. He learned about competition very early on in life. He was one of seven siblings born within 11 years. His father was a surgeon. It’s safe to say that he had his work cut out for him to get his parents’ attention.
He liked sports. He tried out every possible sport his schools offered. He got cut from every team he tried out for, all the way to junior high.
The high school he attended had a rowing team. By this time he was burned out on running, and that was a big part of the training. Still, he was convinced to try out and made it.
By not giving up, and just continuing to try something else, he finally found his sweet spot. His performance for the rowing team ended up in recruiting efforts by a variety of colleges. He chose Columbia University, where he continued rowing.
He went on to make the national team, won the royal event at the Henley Regatta, and received a gold medal from the Princess of Monaco. They also won in Switzerland, Germany, and the Pan Am Games in Venezuela.
He’s never forgotten this lesson of not giving up. Though he also says success is a combination of not just trying different things, but listening and practicing what his coach said, persevering in getting the strokes right, and continuing to learn.
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The Process Of Going Through An Acquisition
Mike Cataldo began his career in medical healthcare software.
That started with connecting doctors with hospitals via dial-up modems back in the 80s. Then when the 90s and the internet and home computers began to spread he revisited it.
Even with the basic information collected at every medical visit, he was able to create a personalized health homecare page for individual patients, with a patient portal.
Patients could use this to request appointments, refill prescriptions, etc. He teamed up with someone he had worked with previously, and in just seven months had a product and customers. They patented the first patient portal.
They raised a little angel investor money and gave a substantial amount of stock to all employees. It’s something he didn’t believe in skimping on.
Just as the dot com bubble was bursting they managed to get an acquisition offer. He describes the process in a kind of painful cartoon analogy. It was a giant company, acquiring their small 30 person startup.
Mike says it was “non-stop due diligence, a million questions, going through spreadsheets, asking questions, looking at financials.” So much that it was a blur. Eventually, he called them out and pointed out that they should be working together as a team on the deal. After a crazy four months, they finally completed the deal.
Mike was just 39 years old at this first exit. He tried to retire, but that never lasts long for true entrepreneurs.
He tried some consulting. Then talked to a venture fund that he is invested in, and asked them to refer people who came along and needed a CEO.
That happened in 2010. He met an inventor with a great idea for a dental laser. However, despite being a great scientist, he didn’t have the business experience to be fundable. Mike did his homework. The science behind it and its potential was great. There were many potential applications for it.
They honed in on one to start with and created Convergent Dental. They chose to tackle cavities first because that was one of the biggest and most obvious problems in the space.
Within 18 months they had their first product out and received FDA approval.
To date, they’ve raised around $80M, through a Series C round. Though most of their funding has come from individuals, as well as family offices.
Storytelling is everything which is something that Mike Cataldo was able to master. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) where the most critical slides are highlighted.
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
The Four Tenets of Teamwork
Convergent Dental has already grown to 100 team members. Every entrepreneur and organization can find that things really begin changing once they get to a certain size. For Mike that was around 80.
He says the biggest thing in hiring well is screening for teamwork. Even above skill and experience. Failing to do this well in the past is what he calls his biggest mistake in entrepreneurship.
He says this is all about ensuring everyone is rowing together. In fact, he formulated his four Tenents of Teamwork just to tackle this.
This includes prioritizing the team over the individual. Having your teammates’ backs, at all costs. Calling out your own failures, and celebrating your success.
Listen in to the full podcast episode to find out more, including:
- Applying and screening for the tenants of teamwork
- The line of innovative healthcare tools Convergent is releasing
- Embracing culture
- Going through financings